TMI Blog2018 (2) TMI 13X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellant Shri R. Subramaniyan, AC (AC) for the Respondent ORDER Per B. Ravichandran The above appeal is filed by the appellant. The appellant has not made the predeposit as mandated under section 35F of the Central Excise Act. 2. The ld. counsel Shri M. Kannan appearing for the appellant submitted that the company remains closed from 29.12.2012 and the appellants liability to bank and its employees stand to the tune of more than ₹ 200 crores and they are not able to comply with the mandatory predeposit. He also submitted that the Central Excise authorities have attached the land of the appellant which is valued at ₹ 110 crores. He submitted that taking into account the value of the property attached by the Central Excise authorities, the mandatory predeposit may be waived. 2. Heard the ld. AR for Revenue. 3. After hearing both sides, we find that compliance of mandatory predeposit stands settled by the decision of the Hon ble Madras High Court in the case of Dream Castle Vs. Union of India reported in 2016 (43) STR 25 (mad.) , wherein the Hon ble High Court observed as under:- 34. Drawing our attention to the decision in R. Rajagopal Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng of pre-deposit of 25% of the disputed tax as per the amended provisions of the Act. 37. In K. Rama Mohanarao Co. v. Union of India [2015 TIOL 511 HC AP = 2015 (321) E.L.T. 195 (A.P.)], a Division Bench of the Andhra Pradesh High Court was concerned with a writ petition challenging the very validity of the amendment to Section 35F under the Finance Act 2 of 2014. While ordering notice in the writ petition, the Division Bench of the Andhra Pradesh High Court took a preliminary view that the writ petition raised two issues, namely (a) the vires of the amendment, and (b) the retroactivity of the amendment. On the second point, the Andhra Pradesh High Court took a view that the amendment may not be applicable to cases where a show cause notice had been issued before the coming into force of the amendment and where the lis had started before the amendments. The case appears to be pending before the Andhra Pradesh High Court. 38. The interim order passed by the Andhra Pradesh High Court in K. Rama Mohanarao Co. was followed by a learned Judge of the Kerala High Court in two cases, namely (i) Muthoot Finance Ltd. v. Union of India [2015 TIOL 632 HC Kerala = 2015 (38) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed, an appellant has to deposit the duty and penalty as stipulated and unless the appellant were to do so, the Tribunal shall not entertain any appeal. This provision would, therefore, indicate that it would apply to all appeals which would be filed on and from the date of the enforcement of Section 35 of the Act. 20. The intendment of Section 35F of the Act is further clarified by the second proviso which stipulates that the provisions of the section shall not apply to stay applications and appeals which were pending before any appellate authority prior to the commencement of Finance (No. 2) Act, 2014. The second proviso is a clear indicator that Parliament has exempted the requirement of complying with the pre-deposit as mandated by Section 35F(1) of the Act as amended only in the case of those stay applications and appeals which were pending before any appellate authority prior to the commencement of Finance (No. 2) Act, 2014. Consequently, both by virtue of the opening words of Section 35F(1) of the Act as well as by the second proviso to the provision, it is clear that appeals which are filed on and after the enforcement of the amended provision on 6 August, 2014 shall be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncy of proceedings or after the order passed by the adjudicating authority, if the law is amended and a condition of pre-deposit is also amended in Section 35F of the Central Excise Act, the appellant would have to comply with the provisions as the amended provisions would apply to all the appeals which are filed after coming into force of the amended Act. It is not disputed by learned counsel for the petitioner that he has filed the appeal after the amendment was made in Section 35F of the Central Excise Act. Therefore, the amended provisions would apply and the appeal of the appellant before the CESTAT would not be maintainable in absence of deposit of an amount equivalent to 7.5% of the confirmed amount of duty liability. The other aspect of the matter is that if the argument of the learned counsel for the petitioner is accepted then he is required to pre-deposit 100% of the excise duty levied on him as he has not filed any waiver application under the old provision before the Tribunal exempting him from making any pre-deposit. The Legislature has granted benefit to the assessees by fixing pre-deposit equivalent to 7.5% or 10% of the confirmed amount of duty liability as per the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i [1996 (3) SCC 142]. In Ramesh Singh, an application for compensation was filed on 23-12-1988 in respect of an accident that took place on 27-5-1988. But, by then, the Motor Vehicles Act, 1988 came into force repealing 1939 Act. The claim for compensation was allowed on 29-6-1992 and an appeal was filed on 25-9-1992. A Division Bench of the High Court rejected the appeal on the ground that a pre-deposit as required by the new Act had not been made. But, the decision of the High Court was reversed by the Supreme Court holding that the right of appeal will crystallise in the appellant on the institution of the application in the Tribunal of first instance and that vested right of appeal will not be dislodged by the new Act. 48. But, it appears that in all the decisions either of the High Courts or of the Supreme Court, there has been no reference to another Constitution Bench of the Supreme Court in Hardeodas Jagannath v. State of Assam [AIR 1970 SC 724] . The said case arose out of the Assam Sales Tax Act, 1947, as amended by Act 6 of 1958. Under the said Act, an appeal against an order of assessment or penalty cannot be entertained by the authority unless the amount of tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Punjab and Haryana High Court, the Court held that the right of appeal is a vested right and that it existed on the date of commencement of the lis. Therefore, the Court held in Khazan Chand Nathi Ram v. State of Haryana [(2004) 136 STC 261] that the provisions, as they existed prior to the amendment, would continue to govern the right of appeal vested in the assessee and that the same was saved in terms of Section 4 of the General Clauses Act, 1898. 52. For arriving at the above conclusion, the Punjab and Haryana High Court relied upon the decision of the Supreme Court in Vittalbhai Naranbhai Patels case [AIR 1967 SC 344], to the effect that the relevant date to find out the applicability of the governing law would be the date on which the cause of action arose. 53. Despite all the conflicts, sometimes latent, sometimes patent and sometimes incorrigible, there has been uniformity of opinion at least on one thing, namely that the right of appeal is neither an absolute right, nor an ingredient of natural justice, and that it is only a statutory right which can be circumscribed by the conditions in the grant. A useful reference can be made in this regard to the decisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e whole of the disputed tax or penalty or both can be said to be the most onerous; (ii) A condition that makes it mandatory for the assessee to deposit the entire amount of disputed tax, penalty or both with a discretion to the Appellate Authority to grant waiver of the whole or part of the amount can be said to be less onerous than the first; and (iii) A condition that the assessee should deposit at least the admitted amount of tax, could be said to be less onerous. 57. That leaves us only with one more type of condition namely the condition to make a pre-deposit of a fixed percentage of the tax demanded or penalty levied or both. The answer to the question raised in this writ petition lies squarely in our answer to the question as to whether the condition of this nature requiring the assessee to make a pre-deposit of 7.5% could be placed in between the categories narrated in (i) and (ii) or in between categories narrated in (ii) and (iii) above. If this condition falls in between categories (i) and (ii), it is more onerous than the existing condition and hence, cannot take retrospective effect. If this condition falls in between categories (ii) and (iii), it is les ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 60. The second contention of the learned Senior Counsel for the writ petitioner revolves around the legal effect of a proviso. We have already extracted the amended Section 35F in a tabular column given in Para 19 above. 61. There are two provisos to the amended Section 35F. The first proviso states that the amount required to be deposited under the new Section, shall not exceed ₹ 10 crores. The second proviso states that the provisions of this Section shall not apply to the stay applications and appeals pending before any Appellate Authority prior to the commencement of Finance Act 2 of 2014. 62. Taking clue from the second proviso, the Allahabad High Court held in Para 20 of its decision in Ganesh Yadav that the appeals filed on or after the commencement of the amended provision on 6-8-2014 shall be governed by the requirement stipulated therein. In other words, the second proviso excluded certain types of cases from the purview of the amendment and the Allahabad High Court came to the conclusion that cases which do not fall within such exclusions, should be taken to be covered by the amended provision. 63. Therefore, it is sought to be contended by Mr. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll established. To sum up, a proviso may serve four different purposes : (1) qualifying or excepting certain provisions from the main enactment; (2) it may entirely change the very concept of the intendment of the enactment by insisting on certain mandatory conditions to be fulfilled in order to make the enactment workable; (3) it may be so embedded in the Act itself as to become an integral part of the enactment and thus acquire the tenor and colour of the substantive enactment itself; and (4) it may be used merely to act as an optional addenda to the enactment with the sole object of explaining the real intendment of the statutory provision. 67. In Ali M.K. v. State of Kerala [AIR 2003 SC 4006], the Supreme Court quoted with approval the opinion rendered by the Privy Council in Jinnings v. Kelly - 1940 AC 206, to the effect that a proviso cannot be used to import into the enacting part, something which is not there. But where the enacting part is susceptible to several possible meanings, it may be controlled by the proviso. 68. In the light of the principles of law laid down in the above decisions, it is contended by Mr. C. Natarajan, learned Senio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntention of Mr. Joseph Prabhakar, learned counsel for the assessee/respondent in the writ appeal, based upon sub-sections (3) and (3A) of Section 85 of the Finance Act, 1994 and the interpretation given to the same by this Court in Winwind Power Energy Private Limited, does not appeal to us. The curtailment of a period of limitation, by way of amendment, takes away a vested right of appeal. An amendment that takes away the right of appeal stands on a different footing from an amendment that merely changes the condition precedent for the filing of the appeal. 74. Mr. Joseph Prabhakar, learned counsel, also advanced arguments on the basis of two Circulars dated 16-9-2014 and 5-1-2015. In Para 1.2 of the Circular dated 16-9-2014, it was stated that the amended provisions would apply to appeals filed after 6-8-2014 and that Section 35F of the Central Excise Act and Section 129E of the Customs Act, contain specific saving clauses providing that all pending appeals/stay applications filed till the enactment of the Finance Bill shall be governed by the erstwhile provisions. 75. On the ground that the aforesaid Para 1.2 of the Circular dated 16-9-2014 created some confusion, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vision has actually taken away the possibility of an arbitrary exercise of power and along with it, the threat of multiplicity of proceedings even at the stage of waiver applications. 80. Therefore, we are of the considered view that the writ petition in W.P. No.13431 of 2015 seeking a declaration that the amended Section 35F of the Central Excise Act, 1944, is applicable only to show cause proceedings initiated on or after 6-8-2014 is liable to be dismissed. Accordingly it is dismissed. There will be no order as to costs. 81. In so far as the writ appeal is concerned, the order-in-original was passed on 27-2-2015 and the assessee challenged it before this Court without exhausting the alternative remedy of appeal. But in the course of the hearing of the writ petition, the assessee seems to have agreed to go before the Appellate Authority and sought a clarification that the amendment would not apply to his case. The learned Judge agreed with the said contention and allowed the assessee to file an appeal along with an application for waiver without making a pre-deposit of 7.5% as per the amendment. The interpretation given by the learned Judge to the amendment, is not corre ..... X X X X Extracts X X X X X X X X Extracts X X X X
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